India and Israel Set to Sign Bilateral Investment Treaty This Week, Followed by FTA Negotiations
India and Israel are poised to enhance their economic partnership with the signing of a Bilateral Investment Treaty (BIT) during the upcoming visit of Israeli Finance Minister Bezalel Smotrich. Scheduled from September 8 to 10, this three-day official tour will include crucial meetings with key Indian ministers and aims to lay the groundwork for a future free trade agreement (FTA). The BIT is expected to bolster investor confidence and facilitate smoother financial interactions between the two nations.
Details of the Visit
Finance Minister Bezalel Smotrich’s visit to India marks a significant step in strengthening economic ties between Israel and India. During his stay, he will engage in discussions with Indian Finance Minister Nirmala Sitharaman, Commerce and Industry Minister Piyush Goyal, and Housing and Urban Affairs Minister Manohar Lal Khattar. The itinerary includes visits to major financial hubs, such as Mumbai and the Gujarat International Finance Tec-City (GIFT City) in Gandhinagar. This visit is part of a broader strategy to deepen Israel’s economic relations with India, focusing on key agreements like the BIT and the FTA.
Sources indicate that the negotiations for the BIT have already been finalized, paving the way for its formal signing during Smotrich’s visit. This treaty is designed to protect investors from both countries, ensuring that Israeli investors in India and Indian investors in Israel receive fair treatment and access to independent arbitration for any disputes. The agreement also aims to provide safeguards against expropriation and ensure clarity in regulations, which is expected to enhance investor confidence significantly.
Significance of the Bilateral Investment Treaty
The BIT between India and Israel is a crucial development in their economic relationship. It reflects a mutual commitment to fostering a more robust investment environment. The treaty aims to protect investors by guaranteeing non-discrimination and fair treatment, which are essential for encouraging foreign direct investment (FDI). Since 2000, Israel has established BITs with over 15 countries, including the UAE, Japan, and South Africa, demonstrating its proactive approach to international economic partnerships.
The BIT is anticipated to facilitate increased bilateral investments, benefiting businesses and economies in both nations. With annual bilateral trade nearing $4 billion, the treaty is expected to further enhance trade relations. Cumulative Indian investments in Israel have reached $443 million, while Israel has invested $334.2 million in India, showcasing the existing economic ties that the BIT aims to strengthen.
Exploring Financial Collaboration
During his visit, Smotrich will also tour the International Financial Services Centre (IFSC) at GIFT City, which is designed to provide global-standard infrastructure for financial institutions. The centre offers a liberal tax regime and various financial incentives, making it an attractive destination for international investments. Both countries see significant potential for collaboration in the fintech sector, leveraging India’s extensive digital infrastructure and Israel’s expertise in cybersecurity and payment technologies.
This partnership could lead to innovative financial solutions and the development of secure, scalable fintech ecosystems in both nations. Beyond bilateral trade, India and Israel are well-positioned to collaborate on financing projects through Multilateral Development Banks, such as the World Bank and the Asian Development Bank, and to support joint ventures in third countries, particularly in the Global South.
Recent Diplomatic Engagements
Smotrich’s visit marks the fourth time an Israeli minister has traveled to India in 2025, following visits from Tourism Minister Haim Katz, Economy and Industry Minister Nir Barkat, and Agriculture and Food Security Minister Avi Dichter earlier this year. These engagements highlight the growing diplomatic and economic ties between India and Israel, reinforcing their status as strategic partners. As both nations continue to explore avenues for collaboration, the upcoming signing of the BIT is expected to serve as a cornerstone for future economic initiatives.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
